6-K 1 dp29554_6k.htm FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 6-K


Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

March 27, 2012



The Royal Bank of Scotland Group plc


Gogarburn
PO Box 1000
Edinburgh EH12 1HQ
Scotland
United Kingdom

(Address of principal executive offices)



Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F X                                              Form 40-F    

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):__

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):__

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes                                                                 No  X 

If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 12g3-2(b): 82-            

This report on Form 6-K shall be deemed incorporated by reference into the company's Registration Statement on Form F-3 (File No. 333-162219) and to be a part thereof from the date which it was filed, to the extent not superseded by documents or reports subsequently filed or furnished.

 
 
 
Article 11 unaudited pro forma information

Unaudited pro forma condensed consolidated financial information

Basis of preparation

The unaudited pro forma condensed consolidated financial information (the "unaudited pro forma financial information") comprises the unaudited pro forma condensed consolidated balance sheet as at 31 December 2011 (the "unaudited pro forma balance sheet") and the unaudited pro forma condensed consolidated income statements for the years ended 31 December 2011, 31 December 2010 and 31 December 2009 (the "pro forma income statements") based on the published audited and unaudited financial statements of RBS, prepared in accordance with IFRS, after giving effect to:

(a)
the distribution of those ABN AMRO businesses attributable to Santander and the Dutch State (the "other Consortium Members"); and
(b)
the divestment of certain businesses to meet the European Commission's State Aid requirements (see below).

The distribution to other Consortium Members has now substantially completed following legal separation of ABN AMRO N.V. which took place on 1 April 2010.

To comply with the European Commission's State Aid requirements, RBS has agreed to make a number of divestments to be completed within four years from December 2009, as follows:

·
RBS Insurance
·
the RBS branch based business in England and Wales, the NatWest branch network in Scotland, along with the Direct SME customers across the UK (termed the 'UK Retail and UK Corporate businesses outlined for disposal')
·
RBS Sempra Commodities (acquired April 2008; majority sold during 2010)
·
Global Merchant Services (sold November 2010)

Collectively, the above are defined as the 'EC State Aid Divestments'.

The pro forma financial information has been prepared assuming the following:

 
·
pro forma balance sheet: the distribution to the other Consortium Members and EC State Aid Divestments had occurred on 31 December 2011;

 
·
pro forma income statements: (i) the divestment of RBS Insurance, which will be accounted for as a discontinued operation, and the distribution to the other Consortium members had occurred on 1 January 2009; (ii) the divestment of the UK Retail and UK Corporate businesses outlined for disposal and the remaining business of RBS Sempra Commodities had occurred on 1 January 2011.

 
·
sale proceeds in respect of the EC State Aid Divestments not yet completed are received in cash and are equal to the net asset values of the businesses to be disposed of.
 
 
 
1
 
 
Article 11 unaudited pro forma information

Unaudited proforma condensed consolidated financial information (continued)

Basis of preparation (continued)

The pro forma financial information is presented for information purposes only and does not represent what the results of operations would actually have been had the distribution to other Consortium Members and EC State Aid Divestments occurred on the dates indicated nor is it necessarily indicative of the results of operations or the financial position that may or may be expected to be achieved in the future.
 
 
2
 
 
Article 11 unaudited pro forma information (continued)

Unaudited pro forma balance sheet as at 31 December 2011

 
RBS (1)
RFS 
 Minority 
Interest (2)
EC 
State Aid 
Divestments (3)
 
Pro forma 
RBS (4)
 
£m 
£m 
£m 
£m 
         
Assets
        
Cash and balances at central banks
79,269 
- 
1,972 
81,241 
Loans and advances to banks
83,310 
- 
(2,579)
80,731 
Loans and advances to customers
515,606 
- 
(923)
514,683 
Debt securities and equity shares
224,263 
- 
(7,992)
216,271 
Derivatives
529,618 
- 
- 
529,618 
Intangible assets
14,858 
- 
(1,088)
13,770 
Property, plant and equipment
11,868 
- 
(132)
11,736 
Other assets
48,075 
(804)
(20,573)
26,698 
         
Total assets
1,506,867 
(804)
(31,315)
1,474,748 
         
Liabilities
        
Deposits by banks
108,804 
(104)
- 
108,700 
Customer accounts
502,955 
- 
- 
502,955 
Debt securities in issue
162,621 
- 
- 
162,621 
Settlement balances
7,477 
- 
- 
7,477 
Short positions
41,039 
- 
- 
41,039 
Derivatives
523,983 
- 
- 
523,983 
Subordinated liabilities
26,319 
- 
- 
26,319 
Other liabilities
57,616 
(417)
(30,977)
26,222 
         
Total liabilities
1,430,814 
(521)
(30,977)
1,399,316 
         
Non-controlling interests
1,234 
(283)
(338)
613 
Equity owners
74,819 
- 
- 
74,819 
         
Total equity
76,053 
(283)
(338)
75,432 
         
Total liabilities and equity
1,506,867 
(804)
(31,315)
1,474,748 

Notes:
(1)
The financial information for RBS has been extracted from the audited financial statements for the year ended 31 December 2011 included on page 268 of the Form 20-F filed with the SEC on 27 March 2012.
(2)
The financial information for the RFS Minority Interest has been extracted from RBS's accounting records for the year ended 31 December 2011 without adjustment and represents those parts of the ABN AMRO businesses attributable to the other Consortium Members.
(3)
The financial information for the EC State Aid Divestments has been extracted from RBS's accounting records for the year ended 31 December 2011 without adjustment and represents those parts of the businesses agreed with the European Commission to be divested, namely RBS Insurance, the UK Retail and UK Corporate businesses outlined for disposal and the remaining business of RBS Sempra Commodities.
(4)
Adjusted pro forma unaudited balance sheet of RBS as at 31 December 2011 excluding those parts of the ABN AMRO businesses attributable to the other Consortium Members and the EC State Aid Divestments.
 

 
 
3
 
Article 11 unaudited pro forma information (continued)

Unaudited pro forma income statement for the year ended 31 December 2011
 
RBS (1) 
RFS 
 Minority 
Interest (2) 
EC 
State Aid 
Divestments 
 (3)
Pro forma 
RBS (4)
Continuing operations
£m 
£m 
£m 
£m 
         
Net interest income
12,679 
8 
(1,065)
11,622 
         
Net fees and commissions
4,924 
- 
224 
5,148 
Income from trading activities
2,701 
(1)
(1)
2,699 
Gain on redemption of own debt
255 
- 
- 
255 
Other operating income (excluding insurance premium income)
4,122 
(1)
(148)
3,973 
Insurance net premium income
4,256 
- 
(4,256)
- 
         
Non-interest income
16,258 
(2)
(4,181)
12,075 
         
Total income
28,937 
6 
(5,246)
23,697 
Operating expenses
(18,026)
(1)
1,335 
(16,692)
         
Profit before other operating charges and impairment
  losses
10,911 
5 
(3,911)
7,005 
Insurance net claims
(2,968)
- 
2,968 
- 
Impairment (losses)/gains
(8,709)
2 
201 
(8,506)
         
Operating loss before tax
(766)
7 
(742)
(1,501)
Tax
(1,250)
- 
121 
(1,129)
         
Loss from continuing operations
(2,016)
7 
(621)
(2,630)
         
Loss attributable to:
        
Non-controlling interests
(14)
7 
18 
11 
Preference shareholders
- 
- 
- 
- 
Paid-in equity holders
- 
- 
- 
- 
Ordinary shareholders
(2,002)
- 
(639)
(2,641)
         
 
(2,016)
7 
(621)
(2,630)
         
Per 25p ordinary share (pence)
        
         
Continuing operations
        
Basic
(1.8)
    
(2.4)
Fully diluted
(1.8)
    
(2.4)
         
Number of shares (million)
        
Weighted average ordinary shares
108,219 
    
108,219 
Weighted average diluted ordinary shares
108,219 
    
108,219 

Notes:
(1)
The financial information for RBS has been extracted from the audited financial statements for the year ended 31 December 2011 included on page 266 of the Form 20-F filed with the SEC on 27 March 2012.
(2)
The financial information for the RFS Minority Interest has been extracted from RBS's accounting records for the year ended 31 December 2011 without adjustment and represents those parts of the ABN AMRO businesses attributable to the other Consortium Members.
(3)
The financial information for the EC State Aid Divestments has been extracted from RBS's accounting records for the year ended 31 December 2011 without adjustment and represents those parts of RBS attributable to the businesses agreed with the European Commission to be divested, namely RBS Insurance, the UK Retail and UK Corporate businesses outlined for disposal and the remaining business of RBS Sempra Commodities.
(4)
Pro forma unaudited income statement of RBS for the year ended 31 December 2011 excluding those parts of the ABN AMRO businesses attributable to the other Consortium Members and the EC State Aid Divestments.
 
 

 
 
4
 
Article 11 unaudited pro forma information (continued)

Unaudited pro forma income statement for the year ended 31 December 2010
 
RBS (1) 
RFS 
 Minority 
Interest (2) 
RBS 
 Insurance (3)
Pro forma 
RBS (4)
Continuing operations
£m 
£m 
£m 
£m 
         
Net interest income
14,209 
(9)
(427)
13,773 
         
Net fees and commissions
5,982 
1 
319 
6,302 
Income from trading activities
4,517 
(4)
- 
4,513 
Gain on redemption of own debt
553 
- 
- 
553 
Other operating income (excluding insurance premium income)
1,479 
154 
(124)
1,509 
Insurance net premium income
5,128 
- 
(5,013)
115 
         
Non-interest income
17,659 
151 
(4,818)
12,992 
         
Total income
31,868 
142 
(5,245)
26,765 
Operating expenses
(18,228)
8 
771 
(17,449)
         
Profit before other operating charges and impairment
  losses
13,640 
150 
(4,474)
9,316 
Insurance net claims
(4,783)
- 
4,698 
(85)
Impairment (losses)/gains
(9,256)
- 
21 
(9,235)
         
Operating loss before tax
(399)
150 
245 
(4)
Tax
(634)
(29)
(68)
(731)
         
Loss from continuing operations
(1,033)
121 
177 
(735)
         
Loss attributable to:
        
Non-controlling interests
(60)
121 
- 
61 
Preference shareholders
105 
- 
- 
105 
Paid-in equity holders
19 
- 
- 
19 
Ordinary shareholders
(1,097)
- 
177 
(920)
         
 
(1,033)
121 
177 
(735)
         
Per 25p ordinary share (pence)
        
         
Continuing operations
        
Basic
(0.5)
    
(0.3)
Fully diluted
(0.5)
    
(0.3)
         
Number of shares (million)
        
Weighted average ordinary shares
107,245 
    
107,245 
Weighted average diluted ordinary shares
107,245 
    
107,245 

Notes:
(1)
The financial information for RBS has been extracted from the audited financial statements for the year ended 31 December 2010 included on page 266 of the Form 20-F filed with the SEC on 27 March 2012.
(2)
The financial information for the RFS Minority Interest has been extracted from RBS's accounting records for the year ended 31 December 2010 without adjustment and represents those parts of the ABN AMRO businesses attributable to the other Consortium Members.
(3)
The financial information for RBS Insurance has been extracted from RBS's accounting records for the year ended 31 December 2010 without adjustment and represents the business agreed with the European Commission to be divested.
(4)
Pro forma unaudited income statement of RBS for the year ended 31 December 2010 excluding those parts of the ABN AMRO businesses attributable to the other Consortium Members and RBS Insurance.
 
 
 
5
 

 
Article 11 unaudited pro forma information (continued)

Unaudited pro forma income statement for the year ended 31 December 2009
 
RBS (1) 
RFS 
 Minority 
Interest (2) 
RBS 
 Insurance (3)
Adjusted 
Pro forma 
RBS (4)
Continuing operations
£m 
£m 
£m 
£m 
         
Net interest income
13,388 
179 
(460)
13,107 
         
Net fees and commissions
5,948 
- 
486 
6,434 
Income from trading activities
3,761 
45 
- 
3,806 
Gain on redemption of own debt
3,790 
- 
- 
3,790 
Other operating income (excluding insurance premium income)
873 
97 
(336)
634 
Insurance net premium income
5,266 
- 
(5,138)
128 
         
Non-interest income
19,638 
142 
(4,988)
14,792 
         
Total income
33,026 
321 
(5,448)
27,899 
Operating expenses
(17,417)
35 
849 
(16,533)
         
Profit before other operating charges and impairment
  losses
15,609 
356 
(4,599)
11,366 
Insurance net claims
(4,357)
- 
4,223 
(134)
Impairment losses
(13,899)
- 
8 
(13,891)
         
Operating loss before tax
(2,647)
356 
(368)
(2,659)
Tax
429 
(90)
61 
400 
         
Loss from continuing operations
(2,218)
266 
(307)
(2,259)
         
Loss attributable to:
        
Non-controlling interests
382 
266 
- 
648 
Preference shareholders
878 
- 
- 
878 
Paid-in equity holders
57 
- 
- 
57 
Ordinary shareholders
(3,535)
- 
(307)
(3,842)
         
 
(2,218)
266 
(307)
(2,259)
         
Per 25p ordinary share (pence)
        
         
Continuing operations
        
Basic
(6.3)
    
(6.9)
Fully diluted
(6.3)
    
(6.9)
         
Number of shares (million)
        
Weighted average ordinary shares
52,891 
    
52,891 
Weighted average diluted ordinary shares
53,329 
    
53,329 

Notes:
(1)
The financial information for RBS has been extracted from the audited financial statements for the year to 31 December 2009 included on page 266 of the Form 20-F filed with the SEC on 27 March 2012.
(2)
The financial information for the RFS Minority Interest has been extracted from RBS's accounting records for the year ended 31 December 2009 without adjustment and represents those parts of the ABN AMRO businesses attributable to the other Consortium Members.
(3)
The financial information for RBS Insurance has been extracted from RBS’s accounting records for the year ended 31 December 2009 without adjustment and represents the business agreed with the European Commission to be divested.
(4)
Pro forma unaudited income statement of RBS for the year ended 31 December 2009 excluding those parts of the ABN AMRO businesses attributable to the other Consortium Members and RBS Insurance.
 
 
 
6
 
 
Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant was duly caused this report to be signed on behalf by the undersigned, thereunto duly authorised.


The Royal Bank of Scotland Group plc
Registrant



/s/ Rajan Kapoor
Rajan Kapoor
Group Chief Accountant
27 March 2012
 
 
 
 
7